Corporate Financial Accounting 14th Edition by Carl Warren,James Reeve,Jonathan Duchac

تمرين 65

Vertical analysis of income statement
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $50,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:

Instructions
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. (Round percentages to one decimal of place.)
2. To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (1).